q3c.

due by 1145pm est. usa

Problem 5-18A Pricing decisions made with ABC system cost data LO 5-1, 5-2, 5-3

Fuller Sporting Goods Corporation makes two types of racquets, tennis and badminton. The company uses the same facility to make both products even though the processes are quite different. The company has recently converted its cost accounting system to activity-based costing. The following are the cost data that Beth Orpin, the cost accountant, prepared for the third quarter of 2014 (during which Fuller made 70,000 tennis racquets and 30,000 badminton racquets).

Direct Cost	Tennis Racquet (TR)	Badminton Racquet (BR)
Direct materials	$	22	per unit	$	18	per unit
Direct labor		32	per unit		26	per unit

Category	Estimated Cost	Cost Driver	Amount of Cost Driver
Unit level	$	750,000		Number of inspection hours	TR: 15,000 hours; BR: 10,000 hours
Batch level		250,000		Number of setups	TR: 80 setups; BR: 45 setups
Product level		150,000		Number of TV commercials	TR: 4; BR: 1
Facility level		650,000		Number of machine hours	TR: 30,000 hours; BR: 35,000 hours
Total	$	1,800,000

Inspectors are paid according to the number of actual hours worked, which is determined by the number of racquets inspected. Engineers who set up equipment for both products are paid monthly salaries. TV commercial fees are paid at the beginning of the quarter. Facility-level cost includes depreciation of all production equipment.

Required:

a.	Compute the cost per unit for each product.(Round intermediate calculations and final answers to 2 decimal places.)

b.	If management wants to price badminton racquets 30 percent above cost, what price should the company set?(Round intermediate calculations and final answer to 2 decimal places.)